Olympia & York asks banks to roll over its huge debt

TORONTO -- Representatives of Olympia & York Developments Ltd., the holding company for the financially troubled real estate empire of the Reichmann brothers, met with about 20 of the company's largest lenders yesterday and asked the banks to roll over the hundreds of millions of dollars of debt that will mature in the next 10 days, the company said.

Olympia & York has been caught in a cash squeeze that has left it unable to repay or refinance enormous amounts of real estate debt coming due this year.

The company, which is based in Toronto, has always been managed in great secrecy. But it has now promised that on April 6 it will give its lenders a more detailed picture of its condition.

A large meeting of Olympia lenders has been scheduled for that date in Toronto. Lenders who have obligations maturing prior to April 6 were asked to roll over the debt, which would buy the Reichmanns a little more time.

Olympia's lenders continued to prepare for what is widely expected to be a protracted overhaul of the company's real estate debt, which is estimated at more than $12 billion.

Citibank, the Canadian Imperial Bank of Commerce and the Hong Kong and Shanghai Bank were appointed as co-leaders of the bank steering committee for the talks.

The company also announced yesterday that Albert Reichmann, through a private company he controls, had acquired 65.6 percent of Camdev Corp., the successor to Campeau Corp.

The Reichmann family acquired a large controlling position in Camdev as a result of their unsuccessful investment in Campeau. It could not be determined yesterday whether the banks had granted approval of the transaction as a mean of allowing a cash infusion into Olympia & York.

The Olympia officials were led by Paul Reichmann, one of the three brothers who built the company into the world's largest real estate enterprise, and Thomas S. Johnson, former president of Manufacturers Hanover Corp., who was named Olympia president earlier this week.